a federal judge has blocked the new overtime rule

by Alison Green on November 18, 2024

A federal judge in Texas has blocked a new rule that would have expanded access to overtime pay to millions more salaried workers.

And not only that — the court also struck down the increase that already took effect on July 1 of this year.

The background: In the U.S., all workers are classified as exempt or non-exempt. Non-exempt workers must be paid overtime (time and a half) for any hours over 40 they work in a single week. Exempt workers are exempt from overtime requirements. To be exempt, you must earn a certain dollar amount or higher and perform relatively high-level work as your primary duties. (There are some exceptions to this, including teachers, doctors, and lawyers, who are always exempt.)

On July 1, the salary level that makes you exempt from overtime pay increased to $43,888 — meaning that anyone making under that was due overtime pay (unless they were one of the exceptions named above). The threshold was set to increase again on January 1, to $58,656.

On Friday, a U.S. District judge ruled that the Labor Department exceeded its authority with the new rule.

So now, the previous threshold of $35,568 — which was set in 2019 — is set to go back into effect.

It’s not yet clear if the Labor Department will appeal the decision. If they do, it’s possible that an appeals court could quickly reverse this ruling … but if the appeal is still pending when the new administration takes over on January 20, they’re unlikely to continue that appeal. (Something similar happened in 2016, when a court halted a similar rule just days before the hike was supposed to take effect, and then permanently blocked it a few months later.)

Notably, the judge this time cited the U.S. Supreme Court’s decision earlier this year to throw out the Chevron doctrine, which for decades had required courts to defer to “permissible” agency interpretations of the statutes they administer, “even when a reviewing court reads the statute differently.”

So, two questions that a lot of employers now face:

  • If they raised your salary to meet the July 1 threshold of $43,888, are they going to leave it a the higher level or lower it back? Most probably won’t lower salaries because of the morale hit it would cause, but some might.
  • If they were planning to raise salaries to meet the January 1 bump to $58,656, will they reverse course or stick with those plans? If they had planned a bump but hadn’t announced it, they’ll probably quietly cancel it. If they had already announced they planned to bump salaries then, they’ll face employee pressure to stick with that.
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{ 87 comments… read them below or add one }

  2. Searching*

    If you meet both the earnings threshold and the duties test, but are paid on an hourly basis, you are still considered non-exempt, correct?

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      1. Fluffy Fish*

        That response felt kinda rude. I believe they’re trying to make is if Texas was their own country then there would be no federal judge from Texas.

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        1. hi*

          I hope you don’t mean that Maya is the one being rude. Comments like “oh can Texas/Florida/whoever just secede and leave us alone” are extremely dismissive of people who live in those states who also suffer from these decisions, likely even worse than those who live elsewhere.

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          1. Fluffy Fish*

            I did in fact mean that Maya’s response felt rude. I understand your sentiment about being dismissive about the people who live in those states and it’s valuable to bring up. Also valid are peoples feelings and exasperation of decisions being made by judges and elected officials of certain states that broadly negatively others.

            But starting by questioning the OP’s intelligence is unnecessary.

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      2. Dawn*

        I have to say that, watching from outside of the country, it is always bizarre how often the law in America is controlled by this or that judge just deciding to block it for the whole country.

        I don’t pretend to understand the purpose behind the system and maybe it has some real advantages! But it at least seems quite inefficient.

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          1. Nobby Nobbs*

            In defense of inefficiency, sometimes it’s a feature and not a bug. Not here, obviously, but an inefficient government by its nature can pile a lot of red tape in front of anyone trying to overturn the whole shebang.

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            1. Feeling Wobblie*

              And yet this overtime pay is overthrown. I’m not arguing with you, I’m just saying “funny how fast things work when people in power want them too.”

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              1. Lisa*

                It is not permanently overthrown. The administration can appeal to a higher court, all the way up to the Supreme Court. But since Trump won and “supports workers” by opposing this sort of law in their favor, his administration would not continue the appeal.

                But the fact that the Supreme Court has overturned previously-settled law is really aggravating. It has been used in good cases, like Brown V Board of Education overturning Plessy V Ferguson, but both Roe and the Chevron doctrine strip away the rights of people, the one in favor of religious extremists and the other in favor of corporations. Which is maddening.

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        3. ampersand*

          I live here and I don’t understand it. It seems like a recent occurrence that states are like: we’re going to block (insert new federal law)! I’m sure it’s just that it’s become common and egregious enough that I’m just now really noticing it, but I also don’t remember that this used to be such an issue. (We also didn’t used to be so divided…)

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      3. Kevin Sours*

        The 5th Circuit covers Texas, Mississippi, and Louisiana but is dominated by Texas. It’s entirely lawless due to a number of Republican appointees making things up to push outcomes favorable to Republican policy. This is made worse by the fact that due to the structuring of the courts making it entirely possible to get a particular judge by filing suit in specific locations. These judges tend to be the most lawless. So people go shopping for these judges to get national level policy overturned.

        The federal court administration implemented some reforms to address this judge shopping but it wasn’t mandatory so the 5th just ignored it.

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    2. QED*

      I’m not totally sure which Texas judge blocked the rule, but due to quirks about how Texas assigns cases within its federal districts, certain litigants will file there in order to have friendlier judges: https://news.bloomberglaw.com/us-law-week/shopping-for-the-judge-you-want-honed-to-perfection-in-texas.

      Congress introduced a bill to fix it, and then Texas said it wouldn’t change the practice regardless. So this is a Texas issue but also it is federal court.

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    3. beautiful, talented, brilliant, powerful musk-ox*

      As a Texan, I agree we keep ruining everything but also like…nearly half of the people who live here would agree as well. We’re not a monolith. In fact, our most populous cities are almost always left-leaning in elections. We mainly suffer from having excessively loud and obnoxious politicians in place and the Super Texans who also want to go back to being our own country, who are often equally loud and obnoxious.

      Like, I get it; I want to move despite the fact that I’ve lived here my entire life. But there’s a whole lot of people who live here who will also find this ruling absurd.

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      1. bleh*

        Floridians who aren’t that way agree. It’s a beautiful place with lots a lovely humans and even lovelier animals. However, I get that the politics are disgusting.

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  5. Harrowhark*

    I’m wondering about employers who, instead of raising salaries, simply made their salaried workers into hourly workers. As someone below the July 1 threshold, it was annoying to lose the perks of being salaried when my employer switched me to hourly pay, and it would be frustrating if I now lose overtime protections as well.

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  6. CatCalendarFTW*

    just to clarify “If a company had already announced they planned to bump salaries, they’ll face employee pressure not to.”

    is the idea here that employees would not want a pay bump because they prefer overtime they would get (despite lower base pay) ?

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    2. Vincaminor*

      The unspoken part of that sentence is “they’ll face employee pressure not to [cancel a pay raise they already announced]”, I think.

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    2. KB*

      Indeed. I see political signs outside a dwelling that is clearly not the residence of a billionaire and think “WTF!”

      Reply ↓
      1. Tech Industry Refugee*

        They will suffer as much as the rest of us, I think bitterly to myself. There has to be a German word for that specific feeling…

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        1. Lab Rabbit.*

          The problem is that their blame will be completely misplaced. And so the cycle repeats and the change they so desperately needs will never happen.

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    4. Lemons*

      Since it’s not the focus of this blog I’ll be brief (delete this if it’s inappropes, Alison), but I’ve been thinking all morning about single-issue voters, because I think those are the ones who tend to vote against their own interests, on any side. It is understandable that people do this, because those single issues are purposefully presented as huge moral or existential threats. It’s razzle dazzle to distract from less exciting issues the same voters would care a lot about if they weren’t being continually refocused on the single issue things.

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      1. Lab Rabbit.*

        Yes, exactly. And they don’t mind what they perceive as a little harm to themselves if it means that some group they don’t like receives a much greater harm.

        It’s sad, so sad. This is why the good aliens don’t visit us. We are so backward and divided.

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  8. Greg Joughin*

    TBH, I expected Kacsmaryk. The Trumpiest of Trumpian judges; and also, as the only federal judge in the Amarillo Division of the Northern District, the judge-shoppingiest.

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  9. Relieved*

    I’m torn on this one and have been from the start. On the one hand, I absolutely abhor the kinds of places abusing their staff with the low thresholds (the quintessential – but not unique – example being hospitality, making some young kid a “manager” at the lowest possible pay, then working them 80 hours a week for no additional compensation).

    On the other hand, I work in a non-profit organization that provides services 7 days a week; there is no more money for either pay raises or overtime. I can’t just wave my magic corporate money wand to jump staff from $45k to $60k. At the current threshold, if Saturday staff calls in sick and someone covers it, they take off the next Monday instead. That means one week they’re at 48 hours and the next week they’re at 32, but they’re salaried, so they get the same pay check for each week. At the new thresholds, it would mean we’d just have to close on those Saturdays in that scenario (or I, as the director and the only one still exempt works all of them).

    I’d love the new overtime rule if it were based on a biweekly period instead of a weekly one, just to allow for the fluctuation. Make it 80 hours in 2 weeks and not 40 in 1 and I’m sold. (The weekly thing also means my staff can’t work a 5-4/9 schedule, unlike our government counterparts.)

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    1. Starbuck*

      I too work at a non-profit and no matter how important the mission, the answer to resource shortages shouldn’t be exploiting workers. I started out years ago as salaried when the threshold was much lower, and my life is SO MUCH BETTER now that the threshold has kept increasing in my state. Absolutely no thank you to a biweekly period. If I have to work extra one week, I’m going to be tired and miss my grocery run and order extra take out THAT WEEK so yes I do need overtime pay to compensate for that. Having an extra day off the next week doesn’t completely make up for that.

      Unfortunately it sounds like your non-profit has already chosen to exploit workers instead of doing less because you can’t afford the current level of services.

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      2. Friendly Neighborhood Curmudgeon*

        Saying that their non-profit “has already chosen to exploit workers” because they don’t meet the threshold or can’t afford overtime is not accurate in all situations. In many parts of the country, including where I live, $40-$50k is a good wage, particularly in the non-profit/government sector.

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    2. doreen*

      The weekly thing doesn’t necessarily keep your staff from working a 5-4/9 schedule – non-government workers can work that schedule by having an unusual workweek , where for example, the first 4 hours of Friday are in one payweek and the last 4 are in a second. So you have 4 9 hour days in the first week plus 4 hours on the 5th day for a total of 40 hours. Then the second week , you have the last 4 hours on Friday plus four 8 hour days for a total of 40 hours.

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    3. AnonJustInCase*

      The answer to staffing issues shouldn’t be abuse of your workers.

      If you can’t pay a living wage to your lower paid employees, maybe you need to rethink the wages you pay your highest paid team. Or rethink those open hours…but not paying your team a reasonable wage shouldn’t be because it creates issues with the operation.

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  10. SummitSkein*

    As devastating as the overturn of Roe was, Chevron was -terrifying- and yet slipped by so many people’s radars. We’re only just beginning to see the potential effects.

    Reply ↓
    1. Dasein9 (he/him)*

      Yep. Chipping away at labor protections is linked to the chipping away of rights to bodily autonomy is linked to the criminalization of undocumented status in some really scary ways.

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      1. BellaStella*

        Bingo. Millions of workers (up to 5million I have read in news articles) are affected by this. Linked to rolling back of worker protections, bodily autonomy, health care and education, there are some dark times that could be coming. It really scares me. An uneducated, unprotected, unhealthy working class is very easy to control.

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    2. Pastor Petty Labelle*

      Roe was obvious about how it affected people directly.

      Chevron was just seen as this legal thing that didn’t seem to matter day to day. Because under Chevron the rules got made and implemented without a lot of fanfare. Oh, all milk must be pasteurized, okay. Then no one notices that people aren’t getting sick from drinking bacteria filled milk anymore. Chevron was negative space.

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      1. Jessica*

        yes, much like vaccines. things that when new were hard won, wonderful advances that stopped tragic conditions of the past, are now taken for granted because they’re working.

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    3. Kali*

      Yes. I was angry but unsurprised by the overturning of Roe. Chevron (and Lemon) getting overturned scared me significantly more because of how insidious the effects will be. Collectively, we won’t realize it until we’re knee-deep.

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      1. SummitSkein*

        THIS. The “collectively, we won’t realize it until we’re knee-deep.” And those of us that realize it before are shouting into a void trying to get people to care. It’s scary.

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  11. Sharks Are Cool*

    At least now I don’t have to worry about switching to the bi-weekly hourly pay schedule from my bi-monthly salary. I don’t know whether anyone at my employer was even aware of the upcoming January bump before I mentioned it to my boss last month (my salary is about 10K+ lower than the expected 2025 threshold), and I hadn’t gotten an answer yet about what they intend to do. I’m professional staff in higher ed so the chances of them raising my salary seemed pretty low, especially since I never work overtime, but the bi-weekly pay schedule for hourly employees would feel like losing money every month with an occasionally windfall.

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    1. Starbuck*

      Is that just a quirk of how your workplace handles it? Because you can totally be hourly and still paid bi-monthly. The pay period doesn’t have to change.

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      1. Sharks Are Cool*

        This is something my boss was trying to get an answer for! If I could stay bi-monthly and get paid overtime in the (incredibly unlikely) event my hours exceed 40, great! But if the only way for the university to track my hours is to add me to the hourly-timecard-submitted-every-two-weeks system, then it feels like I’m losing money monthly even if my pay remains the same overall. Hourly staff also start out earning less vacation time than salaried, although I’ve been here long enough that it wouldn’t make a difference.

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        1. Lurker*

          Maybe try to frame thinking about bi-weekly pay like this: there will be two months out of the year (assuming you’re paid year round and not only during the fall/spring semesters) where you will get paid three times instead of two. I love those months…it feels like an extra paycheck!

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          1. Sharks Are Cool*

            Sure–unless you rely on both bimonthly paychecks at their current amount to meet basic needs and pay bills. Receiving less per month on short notice while waiting for a windfall would have been a significant hardship.

            Getting bumped up above the 58k threshold would have been life-changing. I’ve just been burned often enough by my current employer that I wasn’t holding out a lot of hope!

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  12. The Wizard Rincewind*

    Interesting. The new threshold would have put me in the “you MUST pay overtime” bracket, and I was wondering what my small nonprofit would do, as we get comp time instead of time-and-a-half on the rare times we’re required to work more than 40 hours a week. There’s no way they could have afforded to bump my (and everyone else in a similar pay band’s) pay up to the new threshold, so I doubt that was on the table.

    Leadership also just set the budget for our new fiscal year, so the new budget probably did take this change into account. I have no leadership ambitions, but just this once, I’d like to be a fly on the wall for the meetings.

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  13. Stuart Foote*

    I don’t understand why Congress can’t just pass a law updating the rule? I tend to think the amount should be higher, but I do see the issue with agencies just making whatever rules they want. I see a bigger issue though with courts striking down whatever laws they want though (and while Democrats don’t like to admit, their courts do it too).

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    1. Berin*

      Congress can’t even pass a budget. Additionally, the party that currently controls the House (and in January will control the Senate and the presidency as well) are not fans of this rule.

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    2. Starbuck*

      “I don’t understand why Congress can’t just pass a law”

      Well there’s the whole problem, lol. I can’t imagine something this worker-friendly getting passed, can you?

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    3. Pastor Petty Labelle*

      Chevron gave deference to the agenices as allegedly they were the authorities on any subject since they deal with it every day. 400 odd Congress Critters who have to be elected 2 years plus 100 senators who 1/3 are elected every 2 years who come from a variety of backgrounds don’t have the expertise to know which rules are even needed.

      Also if Congress had to pass a law on everything that needed a rule, there would be gridlock. There just aren’t enough days in the year, even if Congress took no days off, to reasonably consider every rule every agency needs. That’s why Congress passed the enabling law – agencies can make rules. Which Chevron said the courts will defer to those rules as being presumed to be reasonably considered by experts. Which means the deference is gone and the court has to consider every rule as if just some joe schmo came up with it. So instead of gridlock in congress, our already overburdened courts will be burdened with cases arguing over rules.

      Reply ↓
  14. anon24*

    “Let the states decide…”

    For the rest of us of course.

    Yes. I know it’s a federal judge. But when is it not a federal judge in Texas fucking everything up.

    Reply ↓
  15. WarblerB*

    It’s my understanding that those who work at non-profits, and are non-exempt, are frequently asked to accept comp time instead of overtime pay. Is that correct?

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    1. Ask a Manager* Post author

      There’s no exception to the law for nonprofits; they are required to pay overtime for non-exempt workers like other employers and cannot pay in comp time (unless it’s comp time within the same work week).

      Reply ↓
        1. doreen*

          Government employees can be given comp time under certain conditions. One of the conditions is there must be a collective bargaining agreement to allow comp time or it must be agreed upon by the employee and employer before the work is done. The employer can’t do it unilaterally.

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  16. BellaStella*

    Does anyone here have something positive to share on this day? I think this is so sad for so many working people in the USA.

    Reply ↓
  17. HonorBox*

    At my workplace, we moved some salaried individuals to hourly. We try to adhere to the 40 hour per week schedule (for a variety of reasons) but do recognize that from time to time overtime will be necessary, and paid. We did so looking at the January 1 salary level because we’re on a July – June fiscal.

    For the group: My boss has already asked what we should do. I suggested we wait until we know whether this is appealed and what the outcome of that is. I’m going to continue to suggest that we have people paid as hourly employees, though having had to just go in and approve time cards, I could see benefit to moving back to salaried positions. If you’ve made a change to timekeeping, are you going to go back?

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  18. Muffy*

    On the one hand I’ve always believed that having a salary threshold for overtime exemption plus the work type was the right way to go, compared to many provinces in Canada which just have work type exemptions (meaning if you are called a manager then you are “exempt” even if you earn 35k – it’s created a lot of fake managers) Howvwe the current threshold in the US of 35k is way too low. I believe there is one Canadian jurisdiction that combines the two (Manitoba I think) but the salary must be at least twice the average hourly rate (if you’re on salary you’re instructed to divide it by average hours of work per week to determine the applicable hourly rate). It makes it so that it’s about 89k as the threshold for no overtime. There are further exemptions to professions in every province that are separated from role and salary level – such as accountants, doctors, lawyers, engineers, IT professionals involved in specific IT roles, basically anything with a professional regulating body.

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  19. George*

    This new law makes it harder to get salaried entry-level jobs. Most exempt employees are passed the new threshold already, and the ones that aren’t can’t meet the threshold. I’m in favor of not increasing the exempt threshold so that it is not difficult to get entry-level exempt jobs. Paying time and a half on top of 45,000 a year,(over the current threshold) will cause layoffs for some positions. Or understaffing, making work even harder; I’m all for the flexibility of employers meeting their expense needs. This proposed increase only hurts entry-level workers because the employer now has to pay more overtime, eliminating positions. It’s better to have a job that is relevant to your career, a low-wage job, than a job that is relevant to your career, a high-paying job. Relieved is right. The money for higher wages does not come from thin air.

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  22. Lurker*

    For anyone in New York, this doesn’t really change anything. NY already has a minimum non-exempt threshhold that’s higher than the proposed/blocked federal minimum. (I’m not sure if it’s only in NYC, or throughout the state; for some things NYC minimums are higher than the rest of the state.) I would guess there are other states where this is also the case (California?), so if you’re in one of those states make sure you’re not already misclassified.

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  23. George*

    The US mainland isn’t an island it’s not surrounded by water on all sides, it’s a continent. If texas were to secede they would still border the United States.

    Reply ↓
    1. George*

      We are customers of those billionaires; customers rule, billionaires drool, and workers get the short end of both sticks.

      Reply ↓

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